Nevsun Resources

Mines

The Bisha mine in Eritrea is a large VMS deposit rich with precious and base metal located 150 km west of Asmara, Eritrea, that is expected to produce gold, silver, copper and zinc over its 13-year mine life. The Bisha property is a volcanogenic massive sulfide deposit with distinct layers of mineralization. Discovered in January 2003, construction began in September 2008 and the first gold was poured at the end of December 2010. Gold was the primary metal in the top layer and from the start of commercial production in late 2011 until mid-2013, Bisha produced gold-silver doré. By mid-2013 the mine had worked through the gold-silver layer and was into the second layer of mineralization, copper. The copper facility achieved commercial production in December 2013. The third layer of mineralization is copper/zinc and commercial production of zinc is expected to start in 2016. Bisha’s mine area covers 46.5 km². The Property comprises two mining licences covering an area of 24.0 km², (16.5 km² for Bisha Main and the Northwest Zones and 7.5 km² for Harena), and the 54.8 km² Mogaraib River Exploration License. Nevsun purchased the Mogaraib River Exploration License from NGEx Resources in 2012.

The Bisha Deposit

The Neoproterozoic Bisha volcanogenic massive sulfide ore deposit (VMS) is a large 9.39 million metric tons zinc-copper-silver-gold deposit in district in western Eritrea. The site comprises a large, perhaps coeval and cogenetic intrusion known as the Bisha Gabbroic Complex, and s series of mafic to felsic tuffs with small flows and small sedimentary rocks in the proximal footwall, and felsic flows, fine tuffs, and volcanic-derived siliclastic rocks in the upsection. The other two VMS deposits are present along strike: Bisha Northwest, 1.5 km to north-northwest, and Harena, 9.5 km to the south-southwest; additionally, a large, lower grade VMS deposit, Hambok, is present about 15 km to the southwest.

The oxidation and supergene advancement have led to the development of four mineralogically and spatially distinct ore types or zones. The hematite-goethite-quartz gossan, from 0- to ~30-m depth, has high gold, silver, and lead contents, with native gold, argentiferous gold, electrum, anglesite, and lesser cerussite. The kaolinite-quartz-sulfate zone occurs at ~25- to 35- m depth, and also is enriched in gold, silver, and lead, and has the same ore mineralogy as the gossan; additionally it has minor chalcocite and minor to trace amounts of unusual zinc-lead-iron carbonate and sulfate minerals. The supergene sulfide zone is present from about 35 to 65 m in depth and has significant copper enrichment, with predominantly chalcocite, and lesser digenite, covellite, and bornite, along with pyrite, minor pyrrhotite, anglesite, and gangue minerals. The primary massive sulfide, from ~65- to more than 450-m depth, has a noteworthy deposit of zinc-rich ore and a typical VMS sulfide assemblage of pyrite, sphalerite, chalcopyrite, and minor to trace galena, pyrrhotite, tetrahedrite, tennantite, arsenopyrite, baryte, and gangue.

Deposit geology

The host rocks of the Bisha deposit are, for the most part, felsic and intermediate lapilli, ash, and crystal (fine- to medium-grained feldspar, quartz, biotite locally hornblende) ash tuffs that are variably altered. Minor feldspar and quart-feldspar felsic flows and flow breccias are present only to the west of the deposit. Generally the volcanic host rocks are difficult to correlate over distances of greater than 50 m in drill core, due to their inconsistencies in texture and thickness and the overprinting hydrothermal alteration. It is not possible to correlate footwall tuff beds to surface exposures due to the accentuation of penetrative fabrics in these hydrothermally altered and oxidized rocks at surface. Within the drill core, several units have distinctive mafic and felsic juvenile fragments, and these units correlate for up to 250 m. Felsic dikes, up to 5 m thick, are present in drill core but comprise <5 percent of the footwall and hanging-wall rocks. These dikes have up to 25 percent feldspar, quartz, and biotite phenocrysts and are generally fine grained. In the structural hanging wall to the west, massive felsic flows and flow breccias are present at thicknesses of up to 60 m.

The Bisha VMS deposit is a single sheet of massive sulfide up to 70 m in thickness that has been folded and partly tipped along a north-trending, steeply west ]]Strike and dip|dipping]] axis. The eastern lens is on the eastern limb of the fold, while the western lenses are on the opposite western fold limb. These two lenses are separated by erosion and surface oxidation processes. However, sulfide is continuous over the fold nose locally and oxidized material links them for several hundred meters in the central part of the deposit. The surface expression of the northern half of the Bisha deposit is manifested as important hematite-goethite-quartz gossans up to 25 m wide and extending for tens to hundreds of meters.

The eastern lens is a nearly continuous sheet for over 1.2 km that faces west and dips 65° to 70° to the west. Some of the evidence for a westerly facing direction are:

The primary characteristics of the shallower western lenses are less clear due to near-surface oxidation and their unusual geometry. Zinc has been largely removed from the sulfide, and coper, lead, silver and gold are sporadically enriched by near surface supergene and oxidation processes. A few deeper massive sulfide intersections in the western lenses have zinc enriched near the base of the lens, evoking that the western lens faces east, on the other side of an overturned synform from the eastern lens. Barium enrichment in tuffs consistently occurs at depth and east of the western lens but is generally absent to the west of the western lens. This is consistent with barium disposition above the massive sulfide lens after massive sulfide formation and prior to deformation.

Social responsibility

Nevsun Resources Ltd. has a corporate social responsibility program at the Bisha Mine and the company has been producing annual reports since 2011 based on the Global Reporting Initiative standards. Their program focuses on corporate governance, employment and training of local Eritreans, land restoration, health and safety, and community. The company’s corporate social responsibility priorities are based on annual materiality exercises with stakeholder consultation to determine annual priority areas. Some of the notable accomplishments since 2013 have been no lost time injuries for 17.1 million man hours, 91% of the employee base are local Eritreans, and 28% (USD 57 million) was spent on local procurement. Environmental reclamation is incorporated in the company’s ongoing operational activities versus addressing such issues during the mine closure planning. The company indicated in its 2013 CSR report that it had rehabilitated approximately 24.6 HA of land of the 600 HA that have been disturbed since construction began in 2008. In response to allegations of forced labour, Nevsun commissioned an independent human rights impact assessment in 2013/2014 and have shared the results of this study with stakeholders and requested input. The company has committed to providing an update with respect to implementation of the study’s recommendations in Q2 2015.

Human rights violations

In November 2014, three former employees of the Bisha Mine filed a civil suit in British Columbia against Nevsun Resources for complicity in torture, forced labour, slavery, and crimes against humanity. Company CEO Cliff Davis responded saying: "We are confident that the allegations are unfounded. Based on various company-led and third party audits, the Bisha Mine has adhered at all times to international standards of governance, workplace conditions, and health and safety. We are committed to ensuring that the Bisha Mine is managed in a safe and responsible manner that respects the interests of local communities, workers, national governance, stakeholders, and the natural environment.".

Nevsun has previously received criticism from Human Rights Watch for failing to exercise proper human rights due-diligence when engaging with a country where forced labour is allegedly practiced.

A Human Rights Watch report released in January 2013 found that Nevsun Resources failed to take the risks of forced labour seriously and then struggled to address allegations of abuse connected to its company’s Bisha mine in Eritrea. Eritrea’s government maintains a “national service” program that conscripts Eritreans into prolonged and indefinite terms of forced labor, generally under abusive conditions. It is through this forced labor program that mining companies run the most direct risk of involvement in the Eritrean government’s human rights violations.